Hi, As some western countries start pushing the pedal to the interest rates, I concluded this might start a new trend: everyone will keep elevating interest rates (while also printing money without limits), as we go deeper into crisis. I can imagine gold prices chronically going down, as the higher interest rates will make bank savings more attractive. We might be looking at the start of a deeper downward trajectory for gold! This could go on for years... a long time until we hit hyperinflation.
Historical interest rate data not showing connection to gold price fluctuations. “printing money” is more like borrowing it these days, that affecting public confidence in governments. That public confidence in governments is affecting the gold price. Bank could also be in trouble with large amount of government debts locked in with low interest rate, making bank savings less attractive not more attractive.
Bloody hell I got shafted bigtime by all the PM bulls on youtube when Gold went to USD1700. Have lost all faith in Jim Rickards and Peter Schiff and all the rest.
If people aren't massively buying gold, the price isn't going up. There's this naive belief that gold is supposed to go up "just because" currency is devaluing. Well, there are countless reasons why gold is a safe haven, if there is no fear, no panic, the shiny metal ain't goin' up! That's what I learnt through the years watching the economic trends. One of these days someone posted an article proving a link between oil's price and gold's production costs. It's logical that oil is required for the production of gold. So, if oil goes up, gold goes up. Just that right now oil is down (compared to previous years) and one day it will be depleted. When there will be no more oil left, its price won't be sky high, we will simply have alternative sources of energy, engines running on electricity etc. I see high interest rates and the depletion of oil as negative forces, which will drag gold's price down.
if interest rates go up a lot then the whole economy is stuffed! So if you think interest rates will go up that much then get into the doom and gloom camp. (cough... Martin Armstrong) In reality interest rates are going to stay low for a looooooooooooooooooooooooong time.
^ If you listen enough to Peter Schiff, then you'll know "interest rates will have to go up", because the US and EU are treating the economy as a "patient on drugs" and "instead of curing the patient, they give the patient more and more drugs". Basically, what I'm saying is: should currencies devalue, then as they head down the slope in value, the interest rates will naturally go up, banks will give more interest to the people, thus making gold less attractive as a long term investment... so, people will stick more to fiat money instead of buying gold. Less appetite for gold, lower gold prices... I think there's a logic in this, but we're already around production cost prices, so it can't go much lower. Unless... oil goes much lower. As we've learned, oil is needed for the production of gold, so it might as well be the biggest force holding gold at this level right now. Watch the following to see where gold's price is heading: petrodollar - oil price - US interest rates - gold production costs - EUR-USD exchange rate
I want interest rates to go up, but i just can't see it happing. If rates go up a lot and gold goes down i will be very happy with that, because that will mean i will be able to buy a house in Sydney.
If rates go up, stocks and real estate prices go down. Economies go into recession and politicians come under pressure from ignorant voters for allowing it all to go bad. Knowing this the politicians will pressure the central banks to keep rates artificially low - this allows inflation to grow unchecked and feeds into gold and other commodity prices. Many bankers and politicans have openly admitted they want to stoke inflation. Some "analysts" are already calling for a "growth target" instead of an "inflation target" via the press and this is done by keeping rates low despite rises in inflation. The seeds are being planted now for Western governments to attempt to inflate their way out of this debt....
